What is interest?

It’s the percentage that you either earn on your savings or pay on your debt. You can earn interest in a savings account, although right now you’re lucky to get 0.5%. On the other extreme, credit cards kill you with their interest rate which averaged 15.9% in 2021. If you had $10,000 in credit card debt that you wanted to pay off in 2 years, you would pay an extra $1,700 in interest charges!

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